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Fastclick changes their referral payment rules!!!

Just got an e-mail from Fastclick with the following:(e-mail and phone contact info in the message removed by me.)

Dear Publisher,

Fastclick highly values your partnership and is extremely appreciative of your efforts to refer advertisers and publishers to us.

Referrals are intended to reward those individuals actively bringing us new websites and advertisers, increasing our reach and enabling us to become one of the largest advertising networks in the industry.

With the hope of increasing activity and encouraging ongoing referrals, we are modifying our referral policy to a 12 month rewards program.

If you are a publisher that has a referral with over nine months of activity, you will continue receiving referral fees through the 12 month anniversary of your referral plus three months.

If you are a publisher that has a referral with less than nine months of activity, you will receive referral fees through the 12 month anniversary of your referral.

We thank you for your continuing contributions to our network, and look forward to many more years of mutual success.

If you have any questions, please don’t hesitate to contact your publisher support representative at ********* or ***-***-****.

Thank you,

Kurt Johnson
Chief Executive Officer

Having given Fastclick OVER 20 REFERRALS this does not make me happy at all that they are changing the rules! I helped them make more money and now they are pulling back on the cut they were giving to me. This will have a noticable impact on my checks from them! And gives me less incentive to refer others to FastClick.

Although I do understand this is business. And since going public FastClick's stock (FSTC) has been doing terrible! So I'm sure they figure if they cut out many of the referal payments it will make their bottom line look better for investors.

One of the reasons I stuck with FastClick was because of the nice referal bonus I was getting each month. Without that continual revenue stream for me I've got more incentive to "play the field" with other ad companies.

Bottom line is that Fastclick is being beaten down by competitors like Google. And this might give their bottom line a boost, but it won't be enough. Not to mention the business FastClick might now LOSE because of people leaving to use other networks and having less reason to refer others.

If you place a link on your site to the Fastclick network, we will pay you a fee: 5% of the ad earnings for any referred Publishers accepted into the network, and 5% of the campaign budget for any referred Advertisers, indefinitely!

Ditto. I've gotten over 20 referrals and I'm not too thrilled with this. Not at all.

They obviously know this will *NOT* cause people to want to go out and get more referrals - it'll do just the opposite, but it was probably the only way they could think of breaking the bad news to us and somehow giving it a positive slant. Why in the world would I suddenly decide to get more referrals now when I had lifetime payments before, and now I only get 12-15 months worth?

Something I learned years ago during the "get paid to surf" era... never, ever EVER depend on referral earnings for income or put a huge effort in getting referrals - you're at the mercy of the company paying you the referrals.

At FastClick's last investor conference call the analysts were hitting them pretty hard to open up the network a little more to increase their publisher base. To which the FastClick execs on the call responded that they intend to keep a high standard and not open the network up to any and every publisher out there. They want to continue to only accept high quality sites, to maintain a standard throughout the network.

Well how will they continue getting the high quality sites when the best method for getting them (referals) has been scaled back?

With one hand they are pulling up their bottom line, while their other hand is shooting their foot off! And with more (NOT LESS) competiton coming into the game they'll need referals more than ever before! Unlike Google or Yahoo, FastClick does not run a site that draws eyeballs. They depend on web publishers for their very existance!

I think they should have left things alone. More companies are moving to web advertising and FastClick would have been getting more deals as would all web ad companies. There is still room for them all at the table. At least they could have "grandfathered" us long time members like havaloc mentioned and just had future referals on the 12 month deal. Or made an offer that encoraged more referrals. This change does just the opposite.

Next thing you know, they'll be telling us they want to split ad revenue 50/50!!!

Take a look at the TOS, it probably says they can change the rules whenever they want or something to that effect.

I don't know if you anyone was getting enough money from it to talk to a lawyer, but if you were it might be worth a shot.

I've been noticing a growing backlash toward affiliates. A lot of people who have little to no experience with internet marketing (or any understanding of economics, for that matter) are entering the game and becoming shocked when they find out people are getting a big percentage of a sale for "doing nothing."

Its easy to get mad at them, but in the end it only ***** them over. Fastclick will probably start seeing more than a slight decline in referalls now.

This is where tricky legal wording really does give them (FastClick) the edge!

"Indefinitely" is not the same as "life" or "forever" or "as long as the referral remains with FastClick". "Indefinitely" leaves the door open for future changes. Like in the "indefinite leave of absence" example given at http://dictionary.reference.com/search?q=indefinitely

If someone leaves "indefinitely" they are leaving the door open to return. An "indefinite" contract does not equate to "forever" it equates to "until we define it". It literally means the terms have not been defined.

Now the terms have been defined.

We would have a better shot legally IMHO if the terms were originally 5 years and now they changed it to 1 year.

I have a few FC referrals, which have been trickling in some little money lately - never more than $80 per month or so. This has really dropped for the month of June - went from $3.00 for June 1st to 40-50 cents per day by about the 10th. I wonder if they introduced this policy at the start of the month and kept quiet about it waiting to see how well it would effect the bottom line.

Given that most current and established publishers are probably referred by someone, and they probably figure they have most of the publishers they're likely to get, they'll probably make a little money on this bait-and-switch.

I wonder what the legality is of saying "you will make 5% indefinitely for the life of the account, but we have the right to change that should we feel like it".

My referal earnings hit about $3700 a month. I actually got a personal email today reguarding the situation, and called and talked with the media manager. I asked if there would be any exceptions, and was told there wouldn't be.

Like everyone has said, the only real way to combat this type of thing, is to stop sending referrals now.

Dug up my old FastClick contract just to be sure. It has nothing about the referal program in it. But the contract does have the "we can change anything" clause:
From my contract I signed up under in October 2000

Modifications: Fastclick.com reserves the right to change any conditions of contract at any time. Members are responsible for complying with any changes to Fastclick.com Publisher Agreement within 10 business days from the date of change. Fastclick.com will post any changes to this Agreement in the Publisher area of Fastclick.com Website.

So there is the usual out clause. Although if you saved a page that mentions "life" you might want to see what your own lawyer has to say.

Well from the legal stand point fastclick is 100% covered! But personally I think this is not about legal stand point but the way one handles business and in my opinion they did a very bad business move. Since fastclick went public they just like other companies have been forced to raise profits! Now at the end of the day fastclick profit margin after all expenses is probably around 10% not more (I would have to check their public filings for exact numbers) Now referrals are 5% from 60% which comes out to 3% of total revenue, it is understandable that not all webmasters came trough referrals so at the end of the day the realistic number is probably around 2%. Now if profit margin is 10% right now and all of the sudden they save 2% from referrals which they claim as 20% sudden increase in profits average investors will be really happy and CEO will look as super star. Obviously long term they are harming themselves but this is another classic example of companies going public and getting greedy!

I am not so sure they are legally covered - I don't have any referrals with them, so I don't know the process or the agreement there, but while you can certainly change terms of a contract, you generally cannot change them retroactively.

In other words, they can change the rules for future happenings down the road, but they can't, for example, go back and say "well, for May, we're lowering your revenue share to 20%". In this case, you are being paid for a service you provided in the past under terms that said "for the lifetime of the account" or whatever. Legally, I'm pretty sure they cannot retroactively change that policy since your service was already performed under different terms, and they had already agreed to payment terms for that referral.

It may not be worth arguing for most people, but for whoever said they make $3700/mo on referrals, it would be worth discussing the issue with an attorney and possibly having them call fastclick. It would only cost 1 hour's attny fees to explain and call, and it may solve your problem. If FC doesn't budge, taking further action might be costly, but may also be worth it. FC isn't out to violate contracts, so my guess is that if discussed properly in legal terms, they might be willing to budge.

I've e-mailed and faxed Fastclick about this issue. I 100% agree with your post. It's ok to change them going forward, but doing it in a retroactive manner is just wrong. I would not have push them so heavily if I had known they would of done this.

I have yet to hear from them, but I hope to hear from them soon. I'm hoping the delay is due to them reconsidering.

And don't forget this, the archive.org snapshot of their old referral conditions.

I am not so sure they are legally covered - I don't have any referrals with them, so I don't know the process or the agreement there, but while you can certainly change terms of a contract, you generally cannot change them retroactively.

A public company facing a lawsuit from the publishers that brought them a lot of their sites to run ads on would not look good in the investment community. Fastclick might want to consider adding a "grandfather" clause.

I recall when Overture changed their rules a long while back and many of their long time advertisers were upset. They added a "grandfather" clause for them/us.

The easiest thing to do is stop giving fastclick referrals. There are other good CPM companies out there. Like I said, I am going to focus more on getting referrals to other networks now because FC isn't worth it anymore.

Watch stock fall like it's 2000 again and they'll change at least for old publishers.

You must not have seen their stock price lately .

They IPO'ed in April at $12 a share and the stock has gone straight downward since and today is at $8.42 (current quote 20 minutes delayed).

Some legal action would pull it down more, but it's already fallen like 2000 when it started at a post-2000 adjusted IPO price .

Petitions...I don't think that would affect much.... Some big sites leaving?...If they are well known sites maybe it would do something.... But I think a press release showing X number of publishers in a class action against Fastclick over violation of payment terms would really set the heat on HIGH!

If I was making $3,700 a month off referrals, WITHOUT QUESTION I'd speak with an attorney, especially if you've got the words "for life" saved anywhere. Maybe even the "indefinitely" clause might be worth it! I mean we all did honestly feel the deal was to get referral payments as long as that publisher (and we) remained with Fastclick.

Personally a 10% cut in what they pay me for ads I run with them would hurt less than taking away the money I get from referrals!